Functions in Innovation System Approaches
Anna Johnson
Department of Industrial Dynamics
Chalmers University of Technology
SE-412 96 Göteborg
Sweden
Phone: +46-(0)31-772 12 22
Fax: +46-(0)31-772 12 37
E-mail: anjo@mot.chalmers.se
Abstract
In the last twenty years, a large number of innovation system approaches have emerged.
Even though there are similarities between different approaches, they emphasise
different aspects of innovation systems. Moreover, within each approach the system
models differ in terms of the concepts used and the actors identified and emphasised. It
might, therefore, be useful to see if there is any agreement between the approaches with
respect to what they claim “happens” in an innovation system, i.e. what functions are
served in the system. The purpose of this paper is twofold: (1) to find out if existing
innovation system approaches share an understanding of the functions that are served in
an innovation system and (2) to elaborate on the usefulness of the concept of “function”
in innovation system studies. In summary, there seems to be quite a widely spread
correspondence between different innovation system approaches with respect to the
functions they mention so that a number of common, basic functions can be identified.
The concept of “function” has several benefits. It provides a tool for setting system
borders and may be used as a tool to diagnose the present state of a system or to create
an easily grasped picture of innovation system dynamics. It makes it possible to assess
system performance and may be useful in comparative studies since actors may be
uncoupled from what happens in the system.
1
1. Introduction
An increasing number of researchers in fields such as industrial dynamics, technology
policy and firm strategy claim that technological development cannot be viewed as an
isolated phenomenon but has to be studied as a part of a larger system, an “innovation
system”.1 A number of system approaches have emerged, including the national
systems of innovation approach (e.g. Edquist and Johnson (1997), Lundvall (1992) and
Nelson (1992)), the technological systems approaches (e.g. Hughes (1983) and Carlsson
and Stankiewicz (1995)), the sociotechnical systems approach (e.g. Bijker (1995)) and
the network approach (e.g. Håkansson (1990)).
Even though there are similarities between these approaches, they emphasise different
aspects of innovation systems, mostly due to underlying differences in the fields of
research. For example, the industrial network approach focus on how a company’s
relationships to other actors influence its capability to become a successful innovator,
whereas advocates of the sociotechnical systems approach are interested in the social
processes influencing the way we perceive technological artefacts.
Moreover, within each approach authors often focus on describing the characteristics of
innovation systems on the basis of case studies, resulting in quite case-specific system
models that differ in terms of the concepts used and the actors identified and
emphasised.
The differences between and within approaches make it difficult to compare, or indeed
combine, the findings of different system approaches. It might, therefore, be useful to
look beneath their surface to see if there is any agreement between the approaches with
respect to what the claim “happens” in an innovation system.
For this purpose, the concept of “function” may be of use. Inherent in a systems view is
a notion that all system components contribute to the goal of the system or they would
1
For reasons of simplicity, all system concepts are here labelled “innovation systems”.
2
not be considered part of that system.2 The contribution of a component or a set of
components to the goal is what is here called a function.3 The question is, thus, whether
the different innovation system approaches agree on the functions that are served by
components in an innovation system or if there are differences between them also in this
respect.
The purpose of this paper is twofold: (1) to find out if existing innovation system
approaches share an understanding of the functions that are served in an innovation
system and (2) to elaborate on the usefulness of the concept of “function” in innovation
system studies.
The paper is structured as follows. In section two, some different innovation system
approaches and some of the authors representing them will be described with a focus on
the functions they identify. In section three, the approaches’ views of the functions
served in innovation systems will be compared. In section four, the analytical usefulness
of the concept of ‘function’ will be discussed and section five concludes the paper.
2. Functions in Innovation System Approaches
In this section some innovation system approaches will be described with respect to the
functions they identify.4 The intention has not been to make a complete scrutiny of the
literature, but rather to study some representatives of the major approaches. Three major
approaches have been identified: the national systems of innovation approach, the
technological systems approach and the network/development block approach. The
classification of authors into these approaches has been made on basis of a perception of
affinity between authors with regards to level or unit of analysis.5 The three approaches
will be described in sections 2.2-2.4. However, since functions have been defined as
contributions to the system’s goal, the goal of an innovation system must first be
discussed.
2
In an analytical sense. This does not imply that the system in reality is directed by some overriding principle (see also below).
To some extent, this view of the concept of ‘function’ resembles the ones used in political science, although Almond and Powell
(1967) include both system capabilities, i.e. what the system does, and the mechanisms by which the capabilities are achieved in
their description of the functioning of a political system. It is also similar to Talcott Parsons’s notion of functions as contributions of
elements in social system to the continuing operation of the whole (Cuff et al, 1998).
4
The description, thus, includes some analysis; since the authors themselves have not used the concept of function, describing them
in those terms makes it necessary to reformulate their writings somewhat.
3
3
2.1 The Goal of an Innov ation System
The goal of an innovation system may be said to be to develop, diffuse and utilise
innovations.6
This is, evidently, an analytically constructed goal. Few (if any) innovation systems
have been consciously created with an explicit goal to develop, diffuse and utilise
innovations (even though systems may be modified in such a direction by policy or
strategy). Moreover, actors in the system may very well be driven by individual goals
that do not correspond with each other or with the system’s goal (as here defined), e.g.
profits or social welfare.
Nevertheless, for the purpose of identifying functions in innovation system approaches
it is analytically useful to perceive them as contributions to the development, diffusion
and utilisation of innovations.7
2.2 The National Systems of Innovation Approach
Even though all national system of innovation agree that the nation or country is an
appropriate level of analysis, there are many different opinions of how the system
should be defined more exactly. The definitions range from narrow (including only
organisations performing R&D) to broad (including basically anything that affects
learning). The reader should keep this in mind since the definition, of course, affects
what functions the authors identify.
Porter (1990) discusses the importance of national characteristics for the competitive
advantage of individual companies. The basic idea is that in addition to the function
served by companies in terms of acts of innovation (for example through R&D or small
advances based on existing knowledge) several functions are served by components in a
larger system of which the companies form a part.
5
It should be noted that the authors in some cases have referred to and built on each other's work even though they are presented
here as separate from each other.
6
This definition is inspired by Carlsson and Stankiewicz (1995) and Galli and Teubal (1997).
7
The concept of function has been used before in the IS literature in slightly different ways than in this paper. For example, Galli
and Teubal (1997) use the concept of ‘function’ as a synonym to ‘role’ (e.g. R&D and policy-making). McKelvey (1997) use the
concept of function as synonymous to three principles of change that should exist in an innovation system: retention and
transmission of information, generation of novelty and selection.
4
One of these functions is guiding innovative activity, i.e. influencing the direction in
which companies deploy their resources and skills. For example, home demand might
influence companies’ perceptions of opportunities, and standards and security
regulations help (or force) companies to choose specific development paths.
The role of the government is, among other things, to stimulate markets, provide
infrastructure and education and give companies incentives to invest in innovation. The
latter two are of vital importance since the supply of resources, both in terms of
(venture) capital and competence, is necessary to achieve competitive advantage.
In contrast to Porter, Lundvall is not primarily interested in industrial competitiveness,
but in the production, diffusion and use of new, and economically useful, knowledge in
general. The paper referred to here (Lundvall, 1992) is, however, largely focused on the
role of learning in the production of new knowledge.
According to this paper, there are several sources of new knowledge. Whereas some of
the inputs to the knowledge production process originate from search and exploration
efforts in R&D, other arise from learning in connection to everyday activities. Often, the
identification of bottlenecks in technology affects the direction of problem definition
and the search for solutions. The rate and direction of innovation are also influenced by
regulations and standards. Furthermore, providing the resources and competencies
needed is an important task of the system of innovation.
As is the case with Lundvall, Edquist and Johnson (1997) see innovations as results of
interactive learning, where knowledge is combined in new ways or new knowledge is
created, either in connection with R&D or in relation to everyday activities such as
production and marketing.
The actors (organisations) play an important role, as they search for new knowledge,
absorb knowledge created elsewhere and utilise the expected and unexpected results.
5
They also contribute to the distribution of knowledge, knowledge regulation (e.g.
standard setting) and the development of the institutional set-up.
The primary concern of Edquist and Johnson is, however, the institutional set-up,8
which serves four basic functions with respect to innovation. First, institutions (e.g.
patent laws, norms for repayment periods etc.) may reduce uncertainty, either by
providing information about the behaviour of other people or by reducing the amount of
information needed. Second, institutions manage conflicts and co-operation between
individuals and groups. For example, practices of co-operation may work as bridges
between different departments in a company. Another example is social security and
labour market arrangements that influence conflicts between old products and new,
thereby counteracting resistance to change. Third, institutions provide incentives to
engage in learning and to participate in innovation processes. The incentives can be of
various kinds, e.g. income taxes, property rights, perceived competitive advantage and
status norms. Finally, institutions such as tax rules, government subsidies and allocation
of resources to universities channel resources to innovation activities and also help to
re-channel resources from ailing activities to new ones.
Whereas the papers described so far are largely theoretical in nature, the work of Nelson
(1992) is based on a comparative study of the national innovation systems of 15
countries. Among the functions served by different actors in the countries studied, the
investment in and implementation of R&D are given most attention.
In this context, the direction of innovative work is said to be an important function, one
that often is served by customers. Moreover, economic incentives to innovate have to be
provided and the innovative work has to be funded by internal financing of R&D and/or
the supply of venture capital. Other necessary resources, e.g. competence (knowledge
and skills), also have to be made available.
New knowledge may also come from other sources than R&D, e.g. from learning-bydoing, learning-by-using or imitation. For learning to occur, it is, however, necessary to
8
Institutions are defined as ”sets of common habits, routines, established practices, rules, or laws that regulate the relations and
interactions between individuals and groups“ (Edquist and Johnson, 1997, pp. 46).
6
co-ordinate departments within companies, to spread knowledge about new
developments, and to promote co-operation between companies.
Finally, it might also be necessary to support (or even create) markets. This may involve
providing companies with incentives to export.
2.3 The Technological Sy stems Approach
As in the national systems of innovation approach, the authors that are here considered
to be part of the technological systems approach define their systems in different ways.
Moreover, some use other names for their system concepts. However, they all have
chosen a technology (or product) level of analysis. The issue of interest for these
authors is, thus, how different actors etc influence the development, diffusion and use of
a particular technology or product.
The concept of technological system is said to have been first introduced by Thomas
Hughes in the book “Networks of Power”.9
According to Hughes (1983, 1990) 10, technological systems solve problems identified
or constructed by the system. The identification of a problem usually involves
identifying a demand and the available resources that might fill it. Inventions are
sometimes based on the identification of ‘reverse salients’, i.e. components in the
system that have fallen behind or are out of phase with the others (Hughes, 1983;
Hughes, 1990), but they can also be based on experiences from using existing
technology (Hughes, 1983) or on earlier inventions that failed to develop into
innovations (Hughes, 1990).
In addition to invention and development of new technology, there is a need to provide
financial support (Hughes, 1990) and competence (Hughes, 1983) and to raise
9
However, authors Edward Wenk Jr and Thomas J. Kuehn used the concept already in 1977 as synonymous to their concept of
"technological delivery system" (Wenk and Kuehn, 1977).
10
The concept of ‘technological system’ is not well defined in the 1983 book, but in the 1990 paper some system components are
mentioned: physical and legislative artefacts, organisations, natural resources, books, articles, university teaching and research,
inventors, industrial scientists, engineers, managers, financiers and workers.
7
complementary resources (Hughes, 1983). Other important functions are technology
transfer and adaptation.
Hughes (1990) also stresses the importance of institutional factors, e.g. values in the
society and legislation, in the selection of technical, organisational and social solutions.
For a new technology (or a new technological system) to develop it may be necessary to
clear political and legislative ground (Hughes, 1983), stimulate enthusiasm for the new
technology (Hughes, 1983), and through the destruction of alternative systems force
unity from diversity (Hughes, 1990). It may also be important to reduce uncertainty by
taking control of the environment (Hughes, 1990).
In the early 1990’s, Carlsson and Stankiewicz developed a notion of a technological
system largely independent from the one of Hughes, which is described in, e.g.,
Carlsson and Stankiewiz (1995).11
They describe innovation in terms of search and experimentation (i.e. learning), which
makes exchange of information essential. Moreover, for a technological area to grow,
someone has to perceive the possibility of the technology and identify the potential for
growth, the resources needed (in terms of funding, competence etc) have to be secured
and the different activities in the process co-ordinated.
Furthermore, the institutional framework has an important role to play. Institutions12
promote stable pattern of social interactions and transactions, reduce social uncertainty
and prevent or mitigate conflicts. They may also absorb and diffuse some part of the
risk of individual actors, e.g. by stimulating markets or providing information, and may
work for the creation of efficient selection mechanisms, both at company and market
level.
In addition to the authors that explicitly speak of technological systems, there are others
using very similar concepts, e.g. Anders Lundgren, Gunnar Eliasson and Wiebe Bijker.
11
They define a technological system as ”a network of agents interacting in a specific economic/industrial area under a particular
institutional infrastructure or set of infrastructures and involved in the generation, diffusion, and utilization of technology“
(Carlsson and Stankiewicz, 1995, pp. 49). This concept is very similar to the one developed by Wenk and Kuehn (1977), although
no reference is made to their work.
8
Lundgren (1993) uses the concept of ‘industrial networks’,13 defined as technical
systems14 and networks of relationships between actors. Within industrial networks,
innovation is often driven by the identification of imbalances or bottlenecks in the
technological system or the relationships between actors. However, since problems are
defined differently by different actors, due to the fact that their historical background
influence the way they perceive the situation at hand, the resulting research and product
development will follow different routes.
For networks of relationships to emerge, it is necessary that some actor identifies the
technical system, i.e. perceives the complementarities of different products and
technologies, and spreads this notion to other actors. At this stage, the role of networks
of relationships is to co-ordinate specialisation and division of labour between actors,
develop routine transactions and distribute the economic surplus. The actors also have
to attract resources and work to legitimise the activities of the network to the
environment. Later on, the technical system has to be adapted to other systems through
complementary investments in other fields. New problems may be identified through a
process of learning-by-using and standards are developed.
Another related concept is the ‘competence bloc’, developed by Gunnar Eliasson and
described in, e.g., Eliasson (1997).15 The first requirement of a competence bloc is the
presence of innovators who integrate different new and old technologies in an
innovative, i.e. unexpected. Knowledge is transferred by, e.g., movement of people and
imitation. Second, entrepreneurship is needed to identify and select the commercially
viable innovations and move them to the market.
During the innovation process, it is important that venture capitalists recognise and
finance commercially viable opportunities. It is also crucial that there are incentives for
12
Defined as both organisations and regimes.
This concept has been developed based on a study of the emergence of digital image technology in Sweden.
14
In the paper referred to, Lundgren uses the concept of ‘technological system’ for ”complementary products of different
technologies and pieces of knowledge“ (Lundgren, 1993, pp. 147), which obviously is not the same as the technological systems
concept of Hughes and Carlsson and Stankiewicz (described above). In fact, Lundgren (19??) in Swedish uses a concept which is
more correctly translated to ‘technical system’, a translation that will be used here in order to avoid misunderstandings.
13
9
actors to involve themselves in the process, i.e. that actors who succeed are rewarded by
getting reasonable or better returns on their investments. Moreover, the selection
process demands competent actors who have the capability of recognising and
evaluating opportunities. Therefore, organisations supplying educated people have to be
present.
Finally, since technological development results in reallocation of factors of production
over markets, there is also an acceptance (social) problem to be solved. It is therefore
important to have institutions making the necessary social adjustments (e.g. in social
insurance and labour market policy), so that the society is prepared to accept the change
accompanying economic growth.
The last related concept described here is the sociotechnical system concept used by
Bijker (1995).16 According to Bijker, the process of innovation consists of variation and
selection in three layers. First, relevant social groups identify a variety of problems,
based on perceived functional failures or presumptive anomalies17, of which some are
selected for further attention. Second, a variety of solutions are generated and some of
these solutions yield new artefacts. Third, one of the artefacts becomes dominant over
all relevant social groups, partly as a result of one relevant social group’s ability to
convince the other groups about the superiority of its problem definition and resulting
artefact.
Different mechanisms might provide the necessary input to innovation in different
situations. In the case of the social construction of Bakelite, Bijker describes how
research and development activities were guided in a specific direction by monetary
incentives and how learning-by-doing and learning-by-using gave important inputs to
15
According to Eliasson (1997), the main differences between this concept and that of Carlsson and Stankiewicz (1995) are that it is
not input determined but defined in terms of its end results  functionally related products in the market  and that it is concerned
with the selection of successful innovations. These differences are, however, not easily noticed in the work of the different authors.
16
Bijker stresses the need to view every artefact as a ‘sociotechnical ensemble’, since it is impossible to separate the technical from
the social, economical or political. The resulting notion of a sociotechnical system, consisting of different artefacts and actors,
strongly resembles the technological system concepts described above. However, in contrast to the other authors Bijker makes a
strong point of not assuming a fixed artefact after the invention – artefacts are gradually constructed in the social interactions
between and within so called ‘relevant social groups’ and the point of interest is the process by which artefacts attain or fail to attain
a stable interpretation.
17
Assumptions that under some future conditions the system will fail or function badly or that a radically different system will do a
much better job.
10
the innovation process. Moreover, the patent system provided both efficient conflictsolving and supplied incentives for innovation.
2.4 The Network Approac h and the Development Block Approach
Whereas the authors described above are concerned with analysing entire innovation
systems, other authors have chosen other units of analysis. Since these approaches are
focused on smaller parts of the total system, the functions identified are fewer (but
maybe better understood).
Håkansson (1990) focuses on the relationships between actors, especially on the
importance and functions of relationships with different counterparts in the development
process. He identifies three reasons why relationships ought to be important: (1)
interactions with companies that have knowledge in other areas can generate technical
questions and new knowledge to solve them, (2) the evaluation and acceptance of a new
technology or product is dependent on support from several actors and (3) companies
often have to supplement their resources with those of others.
The unit of analysis of Dahmén (1987) is the ‘development block’ which refers to ”a
sequence of complementarities which by way of a series of structural tensions, i.e.
disequilibria, may result in a balanced situation”. Economic success in a development
process might require the realisation of one or more specific complementary stage, and
in situations where stages are missing, the development potential will be released as
soon as the missing stages have come in place.
The primary function of actors is to identify the development block in advance and to
fill the gaps within it by active search, both for new technical solutions and for actors
that can invest in complementary stages, for example market identification or creation.
3. Comparison and Identification of Basic Functions
It is already evident that the different approaches are similar with respect to the
functions they identify, but the questions of how similar and in what ways still remain.
11
In this section, the approaches will be compared more systematically. The comparison
will be built around some basic functions that most authors seem to agree on.
One group of functions, described by all authors, consists of the functions directly
related to the innovation process. The first of these is the function identify problem
(Bijker, 1995; Dahmén, 1987; Hughes, 1983 and 1990; Håkansson, 1990; Lundgren,
1993)18. Almost all of these authors recognise the importance of identifying bottlenecks
in the system, or in the words of the authors themselves “functional failures” (Bijker,
1995), “missing complementary stages” (Dahmén, 1987), “reverse salients” (Hughes,
1983 and 1990), “imbalances or bottlenecks” (Lundgren, 1993) and “bottlenecks in
technology” (Lundvall, 1992). Most considered only bottlenecks of a technical nature,
but they might according to Dahmén (1987) and Lundgren (1993) also appear in other
parts of the innovation system (e.g. in the relationships between actors).
For most authors, the next step in the innovation process is to develop a solution to the
identified problem,19 often a new technology or product, i.e. to create new knowledge.20
Although some of the authors (Edquist and Johnson, 1997; Eliasson, 1997; Hughes,
19XX; Porter, 1990), recognise the possibility to create new knowledge by combining
old and new knowledge in an innovative way, most of them speak primarily of the
production of entirely new knowledge. They also very much agree on the possible
sources of new knowledge: R&D (Bijker, 1995; Edquist and Johnson, 1997; Hughes,
19XX; Lundgren, 1993; Nelson, 1992; Porter, 1990), search and experimentation
(Carlsson and Stankiewicz, 1995; Lundvall, 1993),21 learning in connection to everyday
activities, i.e. learning-by-doing and learning-by-using (Bijker, 1995; Edquist and
Johnson, 1997; Hughes, 19XX; Lundgren, 1993; Lundvall, 1992; Nelson, 1992) and
imitation22 (Edquist and Johnson, 1997; Eliasson, 1997; Nelson, 1992).
18
In this section, references indicate that the identified function is mentioned by the authors in question.
It should be noted that although the authors describe the innovation process in stages, several of them emphasise the feedback
loops in the process. It is, thus, possible for sub-functions creating new knowledge to contribute to the problem identification
function and vice versa.
20
According to Bijker and Hughes, however, there is an intermediary function: to develop a solution idea. They both argue that the
search for solutions is not unconstrained, but is determined by the actors’ perceptions of viable solutions.
21
“Search and experimentation” is of course a much more general concept than the others, but in the papers it is used much in the
same way as R&D, i.e. as a deliberate way of producing new knowledge.
22
Imitation may create knowledge that is new to an individual actor although it might not be new to the innovation system as a
whole. Moreover, even though the authors do not mention the possibility, imitation might give important inputs to the creation of
knowledge that is new to the system as well.
19
12
In addition to the functions directly concerned with the innovation process, the authors
identify several functions that support the innovation process indirectly. Since the
support might vary between innovations, these functions might also work to promote
specific innovations.
The first support function is to supply incentives for companies to engage in innovative
work (Porter, 1990; Edquist and Johnson, 1997; Nelson, 1992; Eliasson, 1997, Bijker,
1995); companies have to feel that they get reasonable returns on their investments in
R&D etc.
The second support function is to supply resources. The most mentioned resources are
indubitably funding (Porter, 1990; Nelson, 1992, Hughes, 1990, Carlsson and
Stankiewicz, 1995, Eliasson, 1997, Dahmén, 1987) and competence (Porter, 1990;
Lundvall, 1990; Nelson, 1992; Hughes, 1983; Carlsson and Stankiewicz, 1995;
Eliasson, 1997). However, some authors also leave the door open for other resources to
be considered (Lundvall, 1990; Nelson, 1992; Hughes, 1983; Carlsson and Stankiewicz,
1995) or do not specify what resources they have in mind (Edquist and Johnson, 1997;
Håkansson, 1990; Lundgren, 1993).
The third support function is to guide the direction of search, i.e. influence the direction
in which actors deploy their resources. Several authors (Porter, 1990; Lundvall, 1992;
Nelson, 1992; Hughes, 1983; Lundgren, 1993; Bijker, 1995) mention this function,
although in different ways. Some authors (Bijker, 1995; Hughes, 1983; Lundgren, 1993)
recognise the guidance inherent in problem identification and identification of solution
idea. Other authors (Porter, 1990, Lundvall, 1992; Nelson, 1992) perceive the guidance
of innovative activity as a function not necessarily served by the companies themselves.
For example, Lundvall (1992) and Porter (1990) mention the role of standards and
regulations. Both groups of authors seem to refer primarily to guidance in a technical
sense, i.e. in terms of choice of product design or specific technology within a product
or technology area, but the possibility to also include guidance towards new
technological areas or perhaps different markets should not be neglected. These latter
13
types of guidance are very much related to the function “provide incentives for /…/
innovative work” and to the fourth support function.
The fourth, support function is to recognise the potential for growth of the innovation,
which is necessary for it to attract resources and be brought to the market. This may
come in terms of identifying technological possibility (Carlsson and Stankiewicz, 1995),
commercial viability (Eliasson, 1997) and/or complementary resources (Lundgren,
1993; Dahmén, 1987).
The fifth support function is to facilitate the exchange of information and knowledge
(Carlsson and Stankiewicz, 1995; Edquist and Johnson, 1997; Nelson, 1992; Lundgren,
1993).23 This may be important both for providing feedback between system
performance and goals (Hughes, 1990) and for diffusion of technology and products on
the market. This function is related to co-ordination of different departments within
companies (Edquist and Johnson, 1997; Nelson, 1992, Carlsson and Stankiewicz, 1995),
to promotion of co-operation between actors (Edquist and Johnson, 1997; Nelson, 1992,
Bijker, 1995; Håkansson, 1990) and to division of labour between actors once cooperation is established (Lundgren, 1993).
The sixth support function is to stimulate/create markets (Porter, 1990; Nelson, 1992;
Carlsson and Stankiewicz, 1995; Dahmén, 1987) since markets do not necessarily
develop spontaneously.24 As already mentioned, diffusion is also connected to the
facilitation of information exchange and the transfer of knowledge/technology.
The seventh support function is to reduce social uncertainty, i.e. uncertainty about how
others will act and react (Edquist and Johnson, 1997; Hughes, 1990; Carlsson and
Stankiewicz, 1995). Related to this function is also the function to prevent or solve
conflicts between companies or individuals (Edquist and Johnson, 1997; Carlsson and
Stankiewicz, 1995; Bijker, 1995), since conflicts often arise when actors do not
understand each other. According to Edquist and Johnson (1997) social uncertainty can
23
Some of these authors use the word “transfer” instead of “exchange” and/or “technology” instead of “knowledge”.
In this context, it is interesting to note that few authors seem to consider market introduction and diffusion as direct parts of the
innovation process; these “steps” are only dealt with in terms of supporting functions such as this one.
24
14
be reduced either by providing information about the behaviour of other people or by
reducing the amount of information needed (e.g. through patent laws). The latter
function is similar to one mentioned by Carlsson and Stankiewicz (1995), i.e. the
promotion of stable patterns of interaction and transactions, the purpose of which can be
said to reduce the need for information.
The eighth and final support function is to counteract the resistance to change that may
arise in society when an innovation is introduced or, in other words, to provide
legitimacy for the innovation (and the activities of the system surrounding it) in the eyes
of the outside world (Lundgren, 1993). Resistance may arise because of conflicts
between new and old products (Edquist and Johnson, 1997) or because of the effects the
new product may have on employment etc (Eliasson, 1997). Some possible means to
counteract the resistance are to stimulate the enthusiasm for the new technology
(Hughes, 1983), to clear political and legislative ground in favour of the new technology
(Hughes, 1983; Eliasson, 199725). Moreover, stimulating relationships between actors
may be needed in order to create support for a new technology or product (Håkansson,
1990; Bijker, 1995)
Obviously, all these functions are very much related to each other. In fact, much of the
system dynamics is created by the interaction of functions (see, e.g., Johnson and
Jacobsson (2000)). For example, the interaction makes it possible for cumulative and
circular causation to appear. A system in which one function is not served (or served in
a way which is not good for the system) may, therefore, be expected to malfunction also
in other ways. On the other hand, virtuous circles may appear as well if the functions
strengthen each other through feedback loops.
To conclude, there seems to be quite a widely spread correspondence between different
innovation system approaches with respect to the functions they identify. The basic
functions described above cover the ones identified in the different approaches to a very
large extent and most functions are mentioned by a majority of the authors. Thus, the
first purpose of the paper has been fulfilled. In the next section, the other purpose of the
25
Eliasson (1997) focus on the possibility to make adjustments in, for example, the social welfare system and labour market
regulations, so that society is prepared to accept new technology even though it might entail unemployment.
15
paper, to discuss the possible benefits of using the concept of function in innovation
system studies, will be covered.
4. Benefits of the Concept of ‘Function’ in Innovation System Studies
Even though it apparently is possible to identify basic functions that, according to many
authors in the field, are (or should be) served in an innovation system, the benefits of
doing so may be less obvious at a first glance. The concept of function may, however,
contribute to innovation system studies in a number of ways.
First, it provides a tool for setting system borders, which is a problem in many existing
innovation system approaches. The innovation system would then include all
components that influence one or more of the identified functions for the object of study
(e.g. a product or technology).26 This means that the borders are not set a priori to
nation, region or technology and that different levels of analysis may be combined.
This type of definition could be especially useful in cases such as wind power
technology, which is influenced by factors on the technological level (e.g. technologyspecific knowledge and subsidies), the sectoral level (e.g. energy sector incumbents,
substitutes and energy taxes) and the national level (e.g. norms and values in society).
Second, the concept of function may be used as a tool to describe the present state of a
system. The mechanisms that in a particular situation induce or block the functions may
be identified and possibly stimulated and removed respectively (by policy and/or
strategy).
Third, it may be useful when studying innovation system dynamics. Mapping the
“functional pattern”, i.e. how functions have been served, over time gives an easily
grasped picture of the way in which the system has emerged. Thereby, the concept may
provide some structure to a process which is often difficult to describe and may, thus,
possibly contribute to the understanding of how innovation systems emerge and change.
26
This type of “extended technological system” was used in a study of the Swedish innovation system for renewable energy
technology (Johnson and Jacobsson, 1999) and in a study of the German, Dutch and Swedish wind turbine industries (Johnson and
Jacobsson, 2000).
16
Fourth, the concept of function allows us to assess the performance of an innovation
system, for example in terms of how it has supported the development of a new
industry. This may be done by analysing the “functionality” of the system, i.e. how well
the functions have been served, which, of course, demands a definition of what “well
served” means in the particular case of interest. 27
Finally, by focussing on functions actors may be uncoupled from what happens in an
innovation system. This may be useful in comparative studies since it reduces the risk of
comparing system structure instead of system functionality; two systems may function
equally well even though their structure is totally different (i.e. functions may be served
in many different ways). Of course, the purpose of a study may be to compare structure
instead of, or in combination with, functionality. In such cases, the concept of function
may still be of use, for example in an analysis of the relationship between how and how
well functions are (or have been) served.
5. Concluding remarks
The existing innovation system approaches seem to have a shared understanding of a
number of basic functions that are (or should be) served in innovation systems. The
differences between approaches thus seem to be less profound than the “confusion” in
terms of levels of analysis and concepts used indicates.
There also seem to be a number of benefits of using the concept of functions in
innovation system studies. So far, the concept has, however, only been used in a couple
of very similar studies. The usefulness for other types of studies is, thus, still to be
demonstrated.
27
This type of analysis may be found in Johnson and Jacobsson (2000), where the difference in success between the Swedish,
German and Dutch wind turbine industries is argued to be due mostly to differences in how the functions were served in the three
innovation systems in different industry life-cycle phases.
17
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